Assume that you have $10,000 to invest into Target, and that you invest this $10,000 on June 25th, 2018. Assume also that you will not need this money before 3 years from now.

Assume the average annual inflation rate is 3% and will remain at 3% for the next 3 years. Assume your inflation-free MARR is 10%. The applicable interest rate to be used in the project is compounded quarterly. Assume your federal income tax rate is 35% and state income tax rate is 5%.

NOTE: For individuals, long-term capital gains and qualified dividends (those received after one year) are taxed by the federal government at 15%. For the first year though, they are taxed as ordinary income. The state of Iowa does not provide any dividend or capital gains tax breaks.

What is the historical stock and dividend growth (individually) of the stock over the past 3 years (12 annual quarters plus Q1 2018). Are these trends best described as Linear, Power or Exponential? (pick one of those three).

Does either stock meet the MARR established in this project?

Provide estimates for projected stock prices for the quarter ending April 30

2021. The company ends their year at the end of January, so their Q1 end of quarter is the end

of April.

Provide estimates for projected dividends received each company each year.

Provide after-tax cash flows of your investment (i.e. initial purchase, dividend receipts, future stock sale) in years 2018, 2019, 2020 and 2021